Apr 4, 2011 1
No businesses like to offer too much discounts, if they can help it. But since customers love discounts, what choice do you have?
And in a price, sorry discount crazy country such as India, the question that gives the most sleepless nights is: How much should I discount online? How much (discount) is enough?
Well, here is my answer depending on what kind of a business you’re running.
If you’re just launching online and want customers to come in: Discount heavily.
Beat the big guys amazed at your aggressive rates. Shout about these rates at the top of your voice wherever you can: Blogs / Facebook / Twitter. Partner with SnapDeal.com / Koovs.com / Sosasta.com / Groupon.in and announce these heavy discounts. Remember you just want traffic to build, your brand to be known, so treat the discounts as a marketing expense, as a customer acquisition strategy.
If your online business has been around a while and you’re trying to grow the subscriber base: Discount and compete with your competitors on pricing.
Be cheaper than them on the items that are in the ‘buzz’, that drive customers to your site, but don’t discount on the other items. Take advantage of your business experience in knowing which products to discount, which to bundle, which to offer as discount to repeat customers only, etc. Basically use your online business experience to be smarter than the start-ups.
If your online business is amongst the leader: Don’t stress on discounting. Stress only on the service.
Keep the customers happy and let them be your evangelists. Be aware of the online price wars, but beat your competition by providing best-in-class customer service. Deliver outrageous service. You cannot go wrong with this. Use the Keep-It-Simple-Stupid principle. And importantly, remember to use your financial muscle power well.